Budget 2013 : Thinking Small

It is unanimously acknowledged among economic analysts that  lacklustre Budget 2013 is devoid of a credible path of reform and the building blocks for realising a better future. We have been served the same recipe once more- the ones that have not offered a more cohesive explanation for the problems or any real solutions.  A coherent, credible and holistic plan for the long-term economic growth rate of the country is absent despite all the built up on the 10-year Economic and Social Transformation Plan (ESTP).

Titbits: Revving up economic growth; Budget 2013: A better use of Special Funds ; Indian Diaspora - Doing business together .

 Revving up economic growth

The latest forecast by some economic analysts of the real growth rate of the Mauritian economy settling down to a slow pace of 3.0 %  for 2012 points to a gradual collapse in our growth performance. It is lower than the 3.4 % posted by the Ministry of Finance which seems to have lost some credibility as their growth predictions have continued falling way off the actual figures. But the Mauritian growth has been going off track as its small open economy is being uncoomfotably exposed to the global meltdown. On 9 October, the IMF released its World Economic Outlook which painted a gloomy picture of the global economy.

Titbits: Overvaluation of the rupee !!!; Our proposals for Budget 2013; The PRB award: a futile exercise ; A strategic rethink of the tourism sector.

Overvaluation of the rupee !!!
Over the past three years in these very columns we have been highlighting the fact that the rupee (REER) was misaligned but at the same time we did point out that while the Bank of Mauritius( BOM) has obsessively focused on maintaining interest rates and stabilising the rupee to contain inflation, it has also alerted to the dangers of relying unduly on a falling rupee to stimulate economic activity.

Policy Paralysis

 Modified version published in L"express, 12 Oct 2012

Titbits: Policy Paralysis; Where are we with the NSTC?; Loosening monetary policy to revive growth !!!; Budgetary figures: Some Rs 10 billion in Special Funds; A financial services centre of substance.

Policy Paralysis

The world economy retains deep scars from the collapse of the western banking system in 2007-09.  Advanced economies’ debt crisis remains unresolved. These economies are in once-a- generation seminal process of deleveraging; debt reduction -- private as well as public -- still have years to run, acting as a drag on growth long into the future.  The emerging markets’ economies, the engine of global growth so far, are slowing down appreciably. Domestically the situation is not so desperate but the economy is obviously not in good shape.

The Supplementary Appropriation Bill: Some comments

The additional spending of Rs 6.1 billion in the 22 progarmmes of the PBB 2011 estimates had to be covered by a Supplementary Appropriation Bill.  In his intervention on the Bill the Minister of Finance reminds us that “ the bulk of the Rs 6.1 billion has been used to provide adequate financial resources for the National Resilience Plan. This is a rainy day fund totalling Rs7.3 billion at end December 2011, created in order for our country not to be caught unprepared with the continuing Euro zone crisis. This prudent measure of unequalled size in our history has received universal acclaim, and is one of the factors cited by the ratings agency Moody’s for our rating upgrade from Baa2 to Baa1.”

Titbits: Double-standards at the Ministry of Finance; Strengthening of Planning; Programme-Based Budgeting (PBB): Some Improvements; No need to shoot the messenger.

Double-standards at the Ministry of Finance

The 2011 Director of Audit’s Report shows that wastage and unnecessary expenditures have continued unabated. It is unacceptable that at a moment where everyone was bearing the brunt of the continuing global and the consequent local slowdown, the Ministry of Finance (MOF) was profligate with taxpayers’ money doling out some Rs 21 million rupees in overtime over the last three fiscal years